Maruti net zooms 56% on better sales

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New Delhi | Updated: July 29, 2015 5:07:18 AM

Maruti Suzuki India, on Tuesday saw its net profit jumping 56.5% to Rs 1,192 crore in the April-June quarter on the back of lower costs, favourable foreign exchange rates and higher sales.

The country’s largest carmaker, Maruti Suzuki India, on Tuesday saw its net profit jumping 56.5% to Rs 1,192 crore in the April-June quarter on the back of lower costs, favourable foreign exchange rates and higher sales.

However, due to lower other income and higher tax outgo, it missed analysts’ estimate of around Rs 1,235-crore profit. The company’s total income was in line with estimates at Rs 13,425 crore, which was up 17.5% y-o-y. Net sales were up 18% at Rs 13,078 crore.

“Higher volumes, cost reduction efforts, lower sales promotion expenses and favourable foreign exchange helped improve the performance,” the company said in a statement.

Maruti sold a total of 3,41,329 cars in the quarter, registering a growth of 13.8% y-o-y. Sales in the domestic market stood at 3,05,694 units, a growth of 13%. The company exported 35,635 units, registering a growth of 21.8%. New launches like Alto (automatic), Ciaz and Celerio did well. The sales of Celerio crossed 1-lakh mark.

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Operating profit (Ebitda) increased 64.75% y-o-y to Rs 2,188 crore, while margin expanded by 460 bps to 16.3%.

Total expenses as a percentage of net sales fell 91% from about 96% last year, while finance costs halved to Rs 19 crore from Rs 38 crore in the same period last year.

Maruti, which imports certain car components from Japan and pays royalty to Japanese parent company, Suzuki, is gaining from a weak yen.

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Realisation per vehicle improved 3% y-o-y to Rs 3.93 lakh and raw material cost to sales ratio declined 30 bps sequentially as the company gained from cost reduction efforts. Other income fell 27.73% to Rs 172 crore. Tax expenses increased 98.8% to Rs 477.60 crore.

The company, which has not been a major success so far in the premium segment, is now planning an aggressive launch of vehicles for which it has created a separate retail outlets — Nexa — for its premium cars.

Next week, Maruti will launch the S-Cross — a crossover between a sport-utility vehicle and a hatchback — the first car to be sold at its new Nexa showrooms. On Tuesday, Maruti’s shares closed up 0.46% at Rs 4,195.65 on the BSE.

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